Franklin Templeton India instructed buyers on Wednesday that the market regulator’s ban on its launching new debt funds would haven’t any affect on current funds that handle $Eight billion in belongings.
The Securities and Change Board of India (SEBI) on Monday barred Franklin from launching any new debt schemes for 2 years after a probe into its sudden closure of six credit score funds final yr discovered “severe lapses and violations.”
Franklin has mentioned it strongly disagreed with SEBI’s order and deliberate to enchantment it. In an e-mail to buyers on Wednesday seen by Reuters, the fund home sought to reassure buyers about any broader affect its different funds.
“I want to make clear upfront, that the SEBI order has no affect on different schemes managed by Franklin,” India President Sanjay Sapre mentioned within the electronic mail.
Franklin continues to handle greater than Rs 61,000 crore ($8.36 billion) for greater than 20 lakh buyers in India, he added.
Franklin has confronted regulatory probes and courtroom battles since April 2020 when it unexpectedly wound up six credit score funds in India with belongings of near $four billion, citing an absence of liquidity amid the coronavirus pandemic. These funds had massive publicity to higher-yielding, lower-rated credit score securities.
Within the Monday order, SEBI additionally ordered the fund home to refund funding and advisory charges, together with curiosity, of greater than Rs 500 crore ($68.51 million), and fined the worldwide large one other Rs 5 crore.
One senior fund supervisor, who declined to be named, instructed Reuters that cash managers grew extra cautious about funding selections after the SEBI order.
“SEBI now shouldn’t be leaving any room for any deviation and it is turning into very strict … there’s a heightened stage of alertness and a focus that has come,” the supervisor mentioned.